Before a shipment hits the road, sea, or sky, someone has to set the wheels in motion – that’s where the consignor comes in.
What Is A Consignor?
In shipping, a consignor is the person or entity that ships goods. Also known as shipper, the consignor initiates the shipping process and, in most cases, holds ownership of the goods. Consignors can also be legally accountable for cargo or freight until it is received and paid by the consignee (i.e., receiver).
How Does A Consignor Work?
Consignors take on several responsibilities during pre-shipment. More precisely:
Packaging & Labeling
They oversee that goods are properly packed to prevent damage during transit and also properly labeled with destination details and necessary handling instructions.
Documentation
Consignors are responsible for providing shipping documents such Bills Of Lading (BoL), Air Waybills (AWB), commercial invoices, export licenses, etc. These documents include the consignor’s name, address, and tax details.
Handling Instructions
Because they initiate the shipment, consignors should provide the carrier with clear guidelines on how to handle the goods during transportation.
Accurate Information
They must provide the carrier with precise and up-to-date information to facilitate a smooth shipment and avoid delays and miscommunications.
Transportation
The consignor chooses a suitable freight carrier and makes all necessary arrangements so that the cargo reaches the port of origin. Depending on the agreement with the buyer, a consignor may also be responsible for paying all freight charges.
Cargo Insurance
Based on the agreement with the customer, the consignor may also be responsible for securing insurance coverage for the shipment.
Rights & Liabilities Of A Consignor
As a key stakeholder in the shipping process, a consignor has some level of legal liability.
Liability for Freight Charges
In general, the consignor is initially liable for the carrier charges. But this can differ depending on the specific Incoterms (like CIF or FOB) agreed upon, dictating which party is responsible for these costs at different stages of the shipment.
However, because they are the party who enters into the transportation contract, a consignor may still be held responsible if the receiver fails to pay, even if there’s an agreement for the consignee to pay.
Responsibility For Accurate Documentation
The consignor is liable for the accuracy and completeness of the shipping documents they provide. Errors or omissions can lead to delays, penalties, and liabilities.
Compliance With Shipping Regulations
Consignors must ensure that the shipment complies with all relevant regulations, including those that have to do with the nature of the goods (e.g., dangerous goods declaration).
On a shipment agreement, consignors also have some distinct rights, for example:
Right To Choose Carrier
In most cases, the consignor has the right to select a freight carrier for every shipment.
Right To Receive Goods Back (Return to Consignor – RTC)
If the consignee refuses to receive the goods, if the delivery details are wrong, or if delivery fails for any other reason, the consignor has the right to have the goods returned to their original location.
Right To Request Rate Information
The shipper has the right to request a written statement of the applicable rate or charge from the carrier as a form of protection against unexpected charges.
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FAQs
Is The Buyer The Consignor Or The Consignee?
The consignee is the person or entity that receives the goods from the consignor, i.e., the shipper. In most cases, the consignee is the final buyer of the goods, but it can also be a middleman.
What Is The Difference Between A Carrier And A Consignor?
The consignor is basically the sender of goods, and the carrier is the company that transports them to the final destination point.
Who Can Be A Consignor?
A consignor can be a person or an entity, for example, a seller or an exporter.